Ahead of its long-awaited IPO, Pham Ngoc Minh, General Director of Vietnam Airlines said that the airline is worth $2.74 billion, shares of which will be sold in accordance with public demand, reports VietNamNet.
The Vietnamese government has been accelerating the equitization of more than 400 state-owned enterprises (SOEs), a process which hasn’t gone particularly smoothly thus far.
However, Mr. Alan Pham, an economist of VinaCapital, said that Vietnam Airlines is one of the few that interests foreign investors since it’s considered to be “the brightest gem among Vietnam SOEs.”
“According to Minh, Vietnam Airlines is expected to serve 15.8 million passengers this year, compared with 14.7 million passengers in 2013. The corporation's revenue is estimated to have risen by 4.5% to VND14.6 trillion, equivalent to $692 million, in the first quarter.”
The national carrier, which pulled in $25 million in gross profits in 2013, originally announced plans for its public offering back in 2007 but were put on the backburner after struggling to find consultants and then by the 2009 financial crisis.
The move comes in the midst of massive fleet expansions by Vietnamese airlines who are seeking to make inroads in the SE Asian and international aviation markets.
“If it goes forward, the IPO could raise capital for expansion. Perhaps even more significantly, it would put Vietnam Airlines on a more even playing field with Southeast Asia’s other five main flag carriers, all of which are now publicly traded,” stated the Centre for Aviation, a leading global aviation news, analysis and research provider.
The company’s asset evaluation was completed in February and the company is now awaiting government approval.
[VietNamNet // byeangel]
